Questions/Answers

In 1987, the Basque Government's study "Poverty in the Basque Autonomous Community" revealed the existence of pockets of precariousness and serious forms of poverty in the Basque Country. The Basque income guarantee system arises from the decision taken to develop a Comprehensive Plan to Combat Poverty in order to face the problems detected in the study. This Plan establishes, for the first time in Spain, a minimum resource guarantee system based on the implementation of what was then popularly known as the "social wage". The Basque social protection model is partially inspired by the anti-poverty policies that at the end of the 1980s were carried out in countries such as France or the United Kingdom but crystallizes into a model with its own characteristics. The Plan for Combating Poverty was initially developed through the Decree 39/89 of 28 February on Minimum Family Income and Decree 64/1989 of 21 March on Social Emergency Aid. One year later, the first regional law on the subject, Law 2/1990, of 3 May, on Minimum Insertion Income, would be approved in the Basque Parliament. With the Family Minimum Income, a path begins that would later be developed and expanded through different reform measures, generally inspired by advances in improving the attention to situations of need. This journey culminates in the current system of public benefits and social aid through the Guaranteed Minimum Income (GMI), Complementary Housing Benefit (CHB) and Social Emergency Aid (SEA). These 30 years of successive measures undertaken by the Basque Government in collaboration with Provincial Governments of the region and Town Councils have largely alleviated poverty in the Basque Country, a territory with 2.2 million inhabitants. Our real poverty rate is 5.7%, well below the 16.1% that existed in 1986, just before the first income guarantee program was approved.

This Basque Social Protection Model improves the living conditions and levels of social inclusion of beneficiaries. Moreover, they are based on the principle of equitability, where any resident of the Basque Country can be a beneficiary regardless of their gender, race, or any other category. Beyond the impact of these benefits on poverty reduction or their effect as a countercyclical and stabilizing mechanism of the economy, it is important to point out the positive effects that these benefits have on many other aspects related to the well-being and quality of life of the beneficiaries.

Goal 1: No Poverty: According to the Statistical Body (Ministry of Employment and Social Policies) around 10% of the Basque population could be considered in a situation of poverty, but through this policy, the percentage has been reduced to 5.1%, below the EU average of 6%. Goal 2: Zero Hunger: the percentage of the population living under food insecurity problems (FSS scale) has fallen from 7.5% in 2014 to 3.9% in 2018. Improvement is seen in serious and very serious cases of food insecurity. These have been reduced from 3.1 to 1.8% between 2016 and 2018, with a fall from 1.7 to 1.2% in situations associated with the perception of hunger. Goal 5: Gender Equality: The GMI is closely linked to the improvement of the quality of life of women in particular. 59.3% of GMI receptors are women, and it is important to achieve gender equality and help reduce the pay gap between men and women. Goal 10: Reduced Inequalities: The Basque Country is among the societies with the lowest levels of inequality in Europe. The Gini coefficient stood in 2018 below that of the European Union (26.7 to 30.7) and 26.7 to 30.4 regarding euro-coin countries.

After the transfer in 2011 to the management of the system to the Lanbide-Basque Employment Service, the social protection model is directly linked to the objective of social and labor inclusion. The Guaranteed Minimum Income of the Basque Country contributes to a better and fairer society because it not only guarantees and protects but also because it promotes employment contributing directly and indirectly to the maintenance of jobs and generating less poverty. The maintenance of the system since 1989, overcoming the serious financial crisis of public administrations after 2008, demonstrates its sustainability.

The system articulated around the Guaranteed Minimum Income (GMI), Complementary Housing Benefit (CHB) and Social Emergency Aid (SEA) has contributed to the long-term economic stability of the Basque population. The GMI has been effective in preventing severe poverty in the Basque Country and has made possible to maintain welfare rates similar to or higher than many European countries. This is particularly relevant as the Basque Country was one of the regions most affected by the industrial reconversion processes in Europe during the 1980s. The Basque GMI model has been able to prevent and contain the growth of inequality without compromising competitiveness and the ability to generate employment. The GMI policy has ensured that during the last economic crisis there was no increase in the most serious situations of poverty. This social protection allowed the Basque Country to be the only region in Spain in which fertility rates were not reduced during this crisis. This system of benefits helps explain why the region is first when ranking the socio-economic position of the regions of Spain. In this context, it is the only region that has had an unemployment rate substantially lower than those in the economic crises of the 80s and 90s.

The Guaranteed Minimum Income (GMI) initiative addresses gender inequality and helps reduce the pay-gap between men and women. 59.3% of the GMI receptors are women. Furthermore, the group receiving the single-parent supplement is also clearly female (25.1% women as opposed to 1.9% men) and has increased significantly (+30%). Finally, the victims of domestic violence, which are mainly women, account for 1.6% of total recipients. This group has increased by 118%. Even though the increase has been notably higher among men in recent years (10% compared to 21.6% in men), the average monthly expenditure is still higher among women.

The Guaranteed Minimum Income (GMI) offers the capacity to reduce poverty in the Basque Country: in 2016, as a consequence of the receipt of these benefits, the real poverty rate went from 9.1% to 5.7%, which meant a capacity to reduce poverty of 36.8%. In absolute terms, more than 71,000 people were lifted out of poverty due to the receipt of these aids. If the GMI did not exist, almost 200,000 people - 9.1% of the Basque population - would be in a situation of real poverty, depending solely on their own income and that obtained from national social protection systems. 70% of this group -i.e. 6.3% of the population- has access to the GMI: of these, more than half come out of poverty while around 40% (2.9% of the population) remain in poverty. However, their situation has improved substantially thanks to the receipt of this aid, and the gap between their income and the poverty threshold has been significantly reduced from 74% to 16%. In short, the GMI reduces poverty in the Basque Country, both in length - 36.8% - and in intensity.

In 1987, the study "Poverty in the Basque Autonomous Community" revealed the existence of precariousness and serious forms of poverty in the Basque Country. In 1989, the Basque Government set in motion the Integral Plan of the Fight against Poverty. The Plan to Combat Poverty is initially developed through Decree 39/1989 on Minimum Family Income, and Decree 64/1989 for Social Emergency. The first regional law on the subject, Law 2/1990, was approved in the Basque Parliament. With Law 12/1998 against Social Exclusion arrives the consolidation of the revenue guarantee policy in the Basque Country. The 1998 legislation will be partially revised in different laws adopted in 2000. The Law 10/2000 of the Charter of Social Rights was decisive because it introduced the linkage between the Basic Income and the Minimum Interprofessional Salary. The Law 4/2007 introduces two notable improvements. It incorporates care for persons under the age of 23 in a special situation and a supplement for recipients of the Basic Income to remain in the dwelling house. This is the beginning of the Complementary Housing Benefit (CHB). The next important reform is Law 18/2008 which marks a significant step forward in the shift towards active policies in the development of the Guaranteed Minimum Income (GMI). In 2009 Lanbide-Basque Employment Service is created and starts operating in 2010 after the transfer of active employment policies to the Basque Government. In 2011 Lanbide is empowered to process and adjudicate the Guaranteed Minimum Income (GMI), Complementary Housing Benefit (CHB) and Social Emergency Aid (SEA). Lanbide carries out the tasks of evaluation of the system, through the Survey of Poverty and Social Needs, perhaps the official statistic with the greatest historical trajectory in Europe. This information includes all individuals registered with the Basque Public Employment Service. The data is collected on the last day of each month.

Optimal coordination levels have always been the main requirement of this system of social protection to work, and in this sense, there are currently in the implementation phase several coordination committees at the smallest expression of the territorial composition of the Basque Country. These are, at the municipal level and at the neighborhood level with the aim of placing the person at the center of a coordinated intervention between the different systems of benefits and aid (employment, social services, education, health, and housing).

The Basque GMI is innovative because is open to people who cannot work, those who need work, and retirees. The Basque Country was first implementing the employment bonus mechanisms that allow people receiving these benefits to access employment. This mechanism was introduced before the French initiatives. The GMI ensures that people with a job have a higher income than those who receive the benefit and don’t work, encouraging access to employment. Unlike many European countries, the Basque GMI has a higher expenditure because is open to retirees or those over 65 due to the insufficiency of the retirement model in Spain.

The initiative was inspired by other European models, but it has other original aspects regarding these countries and other Spanish regions since the Guaranteed Minimum Income (GMI) of the Basque Country offers coverage to people of foreign nationality without a legal residence permit. In most European Union countries, people without a residence permit have to access other types of economic benefits, generally of a more case-by-case type.

The implementation of the Basque Guaranteed Minimum Income (GMI) has been the basis for the extension of minimum incomes in all the other regions of Spain. The approach of extending the GMI to people who work but are in a situation of need has been progressively adopted by other countries and regions (Navarre and Catalonia) and, in fact, is the basis of similar reforms carried out in recent years in countries like France, the United Kingdom, or Germany. Germany, the United Kingdom, and France - twice since 2009 - have modified their GMI systems in recent years to allow simpler compatibility between welfare benefits and work income. Far from being a secondary or lesser objective, the idea that it is necessary to make the earning of a low salary compatible, both conceptually and administratively, with access to the income guarantee system has been at the heart of the architecture of the new generation of minimum incomes in Europe.

Already transferred and/or adapted to other contexts.

The Basque Country is one of the territories with the highest per capita expenditure on this type of service, considerably above the EU average. With 224.69 Euros yearly expenditure per inhabitant allocated to the Guaranteed Minimum Income (GMI) and Social Emergency Aid (SEA), the Basque Country is among the territories that make the greatest effort. The overall number for 2017 was 468,426,721 Euros. This effort is strictly linked to the weakness of the Spanish welfare system. The differences with other regions of Spain are even more notable, with per capita expenditure multiplied by ten, for example, compared to Catalonia.

The social protection model is directly linked to the objective of social and work inclusion. The maintenance of the system since 1989, overcoming the Great Recession of 2008, demonstrates its sustainability. The Basque Government, in collaboration with the Provincial Councils and City Councils, has opted for a system of public benefits based on the Guaranteed Minimum Income (GMI), Complementary Housing Benefit (CHB) and Social Emergency Aid (SEA), which favors social cohesion, and which is viable and sustainable. Social investment is cohesion, equality, and transversality of policies. This commitment has been maintained for 30 years.

Yes

Two specific issues were evaluated: whether the GMI itself delays employment by raising the reserve salary of the recipients of aid, and the effectiveness of the activation measures aimed at the recipients. Data from the administrative register of the Public Employment Service (Lanbide) is used. This monthly longitudinal information of 12 months, from February to January, includes all individuals registered Lanbide. The data are collected on the last day of each month. Lanbide carries out the tasks of evaluating the system, through the Poverty and Social Needs Survey, perhaps the official statistic with the longest historical trajectory in Europe.

The first part of the analysis uses the set of indices defined by Foster, Greer, and Thorbecke (1984). One measures the incidence of poverty. The second is the poverty gap. Finally, a poverty sensitivity indicator. The second part of the analysis makes a counterfactual evaluation of the impact of the minimum income on the probability of finding a job, as well as of the activation measures. Different methodologies must be used depending on the characteristics of the data. These methodologies are known as Inverse Probability Weighting, Augmented Inverse Probability Weighting, and Propensity Score Matching.

A high impact in terms of prevention of the various forms of poverty, in particular with regard to its most serious forms. The proportion of households without sufficient resources to meet extraordinary expenses is lower in the Basque Country than in all European countries, with the exception of Sweden. The compatibility of protection with comparatively low unemployment rates, especially in the context of the Southern European countries. The introduction of the system has been compatible with the transformation of the Basque Country from one of the regions with the highest level of unemployment in Spain at the end of the 1980s with currently the lowest unemployment rate. High social levels of integration, not only among the local Basque population but also the population of foreign origin living in the Basque Country. The result of evaluating the impact of the Guaranteed Minimum Income (GMI) in obtaining employment is that it does not provoke in itself a delay in securing a job. Consequently, in addition to reducing poverty and therefore favoring social cohesion, as shown in the first analysis, the GMI does not reduce the rate of actively achieving employment.

Basque society stands behind the Guaranteed Minimum Income (GMI) system by means, among others, of the campaign in Basque language Eskubideak Gehi, (More Rights) promoted by the network Fighting Against the Poverty of the Basque Country and which has been supported by more than 125 including political groups, trade unions, social entities, religious entities, etc. The Basque Government, through the Regional Ministry of Employment and Social Policies, and specifically through the body depending on this ministry, Lanbide-Basque Employment Service, articulates and manages the benefits system. Lanbide, using the systems of interoperability with the different Public Administrations, Provincial Councils and City Councils, to collect complaints and investigates possible frauds to the system. Lanbide maintains permanent contact with entities in charge with the protection of people in situations of greater vulnerability, which are close to the local realities, and collect suggestions to help improve the protection of the most excluded people from society. This close relationship has allowed Lanbide to attend a total of 55 improvement initiatives proposed by the Third Sector. Likewise, in order to guarantee the social rights of the population, Lanbide has implemented 27 recommendations in a period of two years proposed by the regional ombudsman.

The Basque social protection model requires constant dialogue between Lanbide-Basque Employment Service, which manages the Guaranteed Minimum Income (GMI) and the Complementary Housing Benefit (CHB), and the Provincial Councils and Town Councils, which manage Social Emergency Aid (SEA) through Social Services. Lanbide maintains permanent contact with entities in charge with the protection of people in situations of greater vulnerability, which are close to the local realities, and collect suggestions to help improve the protection of the most excluded people from society. This close relationship has allowed Lanbide to attend a total of 55 improvement initiatives proposed by the Third Sector. Likewise, in order to guarantee the social rights of the population, Lanbide has implemented 27 recommendations in a period of two years proposed by the regional ombudsman. Of the aforementioned collaborations, it is worth highlighting some of the improvements incorporated by Lanbide in the management of the GMI during the current parliamentary term, advancing in the protection of people. The design of the GMI was prepared with the contributions of different trade unions, social entities, the business world, political groups, etc.

The Guaranteed Minimum Income (GMI) system has been key to the social and economic stability of the Basque Country. The main objective of the reforms proposed is to preserve and improve the model, guaranteeing its social legitimacy and economic sustainability in the coming years. The reforms are aimed at: - Deepen the family and child-friendly approach to combat child poverty and the intergenerational transmission of social exclusion. - Simplify the concept of the cohabitation unit and adjust the system to calculate the benefit. - Improve the attention of the needs and groups that are not adequately covered today. - Order access procedures and facilitate more efficient management of benefits. - Improve the control of individual identification and effective residence in the region, as well as making progress in the prevention of fraud. - Deepen the concept of double right, reinforcing the work accompaniment of the employment services and the social accompaniment of the social services, which are necessary for those receiving the GMI to find work. - To promote the beneficiaries of the GMI to find a job, involving Basque companies in the fight against exclusion. - Consolidate a structural system of employment bonuses that avoids the "poverty trap" and responds to poverty through employment.